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Challenge to ACA employer mandate fails

For the second time in two years, the Supreme Court has refused to hear constitutional challenges to the new federal health care law’s mandate that employers provide affordable health insurance for their workers.  Without comment, the Court on Monday turned aside a broad complaint about that Affordable Care Act mandate by Liberty University, a religiously affiliated college in Lynchburg, VA.   Liberty also had sought review of new challenges to the individual insurance mandate, but those, too, failed with the denial of review.

The Court granted no new cases, having accepted three last week.  It asked the federal government for its views on a case testing whether federal law bars customers who bought natural gas in the retail market from filing state antitrust lawsuits challenging price-setting in the wholesale market (ONEOK Inc., v. Learjet, 13-271).  Justice Samuel A. Alito, Jr., took no part in that action.  The Justices also denied review of two significant new cases testing the power of state governments to impose taxes on sales to customers in those states by Internet retailers like Amazon and Overstock.

In a summary ruling, issued in an unsigned three-page opinion, the Court told the Sixth Circuit Court to sort out a dispute over which federal law governs attempts by taxpayers to get a refund when they overpaid their taxes, and seek interest on the overpaid amounts.  The decision came in the case of Ford Motor Co. v. U.S. (13-113), a case involving Ford’s claim that the government owes it added interest of at least $445 million.  The government had told the Court that the case belonged only in the Court of Federal Claims, not the regular federal courts.  That is the key issue the Sixth Circuit is now to decide.  The case is not about the right to sue for a tax refund; it focuses only on where to sue to seek additional interest when too much tax has been paid.

The Liberty University case that the Court chose to bypass (Liberty v. Lew,13-306) involved several challenges to the ACA that the Supreme Court either had refused to review, or had not been appealed to the Court, when the Justices two years ago ruled on the first constitutional challenges to the law.  While agreeing then to review the individual mandate, it refused to review the employer mandate.

The Court in the end upheld the individual mandate under the government’s taxing power, after ruling that the provision was beyond Congress’s power under the Commerce Clause.  Liberty University, besides seeking to contest the employer mandate under the Commerce Clause, also sought review of its constitutionality under the taxing clause.   The University’s petition also contended that the individual mandate violated the religious freedom of the school and of its employees, under the Constitution’s First Amendment and the Religious Freedom Restoration Act.

In a belated move in its case, Liberty also attempted to challenge the ACA’s contraception mandate on employers, but the Fourth Circuit Court had found that issue was raised too late and it did not decide it.   Last week, the Court agreed to rule on the constitutionality of the contraceptive mandate in two new cases.

Liberty University was one of the first to go to court to protest the new health care law.  It sought Supreme Court review earlier, but the Justices also declined to hear that case, although they did agree to allow Liberty to return to the Fourth Circuit to press its claims.  That further review by the Circuit Court, rejecting all of Liberty’s challenges, is what the Justices refused to disturb on Monday.

Although the ACA’s employer mandate — which applies to all employers with 50 or more workers and that provide health coverage — has now survived two attempts to challenge it in the Supreme Court, there remain other challenges to it that are working their way through lower courts.   The employer mandate was scheduled to take effect this year, but has been postponed until 2014 to give employers more time to adjust to it.

The Court’s refusal on Monday to hear two new cases challenging state taxes on Internet-only sales followed a pattern in recent years, in which the Court has refused repeatedly to reconsider or to further clarify its famous 1992 decision in Quill Corp., v. North Dakota, limiting state power to tax sales to in-state customers, allowing such levies only when the company involved had an actual presence in the state — such as an office, sales force, or property.

Turned aside Monday were Inc., v. New York Taxation Department (13-252) and v. New York Taxation Department (13-259).   Both Internet retailers contended that they had no presence in the state, and thus should be exempt from taxes on purchases from them by New York customers.   New York’s highest state court, the Court of Appeals, ruled, however, that they were subject to tax in New York because they had contracts with local affiliates that generated customers for them through Internet links to the Overstock and Amazon websites.

The Court issued a one-sentence order that dismissed, for lack of jurisdiction, the case of Alabama Legislative Black Caucus v. Alabama (13-395).  The case questioned whether challengers to a state legislative redistricting plan have a right to sue when the plan breaks up many counties between districts, with the result that there is a wide difference in the representation of county residents because county delegations in the legislature have control over state laws affecting those residents.

The Court took no action on Monday on a new case testing the power of states to flatly ban contributions by corporations to political candidates.  The case of Iowa Right to Life Committee v. Tooker (13-407), may be considered later, but also may be put on hold until after the Court clarifies First Amendment doctrine on campaign donations in a pending federal case.



Recommended Citation: Lyle Denniston, Challenge to ACA employer mandate fails, SCOTUSblog (Dec. 2, 2013, 9:42 AM),